Is Re-engineering Possible in the Public Sector? A Brazilian Case Study
Nereu F. Kock Jr. Robert J. McQueen
Dept. of Management Systems University ofWaikato Private Bag 3105 Hamilton New Zealand
[email protected]
Is Re-engineering Possible in the Public Sector? A Brazilian Case Study
ABSTRACT This paper describes an attempt to re-engineer a large public sector organisation in Brazil. The organisation, a civil engineering company, had a major role in a large government construction project of high political relevance, by the time the re-engineering attempt was started. As a result of the re-engineering attempt, the organisation had its IT infrastructure significantly improved. The access to IT was decentralised by the downsizing of the applications from a mainframe to a local area network. The large construction project for which the organisation had been hired by the government was successfully completed. However, no radical changes in the organisation's business processes had resulted, despite the US$ 8 million invested in the re-engineering attempt. Moreover, even though some processes had been automated, almost no staff reduction was effected. The lack of layoffs meant that even the increase in efficiency in those processes, which by no means was radical, was not realised. This paper analyses this case of "successful failure" and its implications for reengineering in the public sector.
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INTRODUCTION
There has been an exponential increase in the number of publications dealing with organisational change and its impact on productivity and quality improvement in the last decade. The most successful examples seem to be related with process-focused change, particularly found in the total quality management and re-engineering movements. Examples of successful application of total quality management to improve public sector organisations have been commonplace in the literature (Walton, 1991; Raff and Beedon, 1994; Hodgson, 1994). This is not the case of re-engineering, which still seems to be seen with reserve by public sector leaders.
A survey in (Champy, 1995) shows that re-engineering has had widespread adoption in the private sector. Approximately 70 per cent of all private businesses in US and Europe have run, or are running, some form of re-engineering project. The same survey suggests that the failure rate of re-engineering attempts has been equally high - over 70 per cent. A discussion, following that survey, suggests that much of that failure has resulted from a lack of change in management paradigms, which should accompany the radical changes in the business processes. Archer and Bowker's (1995) survey with consulting companies specialising in re-engineering indicates that some other factors are likely to be lack of communication of a clear vision of the project, lack of staff participation and ownership, lack of involvement from staff at different levels, failure to instil a re-engineering culture, and lack of project organisation and planning.
In this paper we describe a case which we believe was a failed attempt to re-engineer a public sector organisation. Paradoxically, the outcome of the effort was regarded as successful by the organisation's CEO and part of its senior management staff. Our analysis of the case suggests that re-engineering's failure rate is likely to be even higher in the public sector than it is in the private sector. However, the underlying reasons for this pessimist conclusion are different from those identified for private organisations. These
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reasons are related to factors which re-engineering groups may not be able to control, and that are characteristic of public sector organisations.
The data about this case was obtained through participant observation, and interviews with a group of over 50 individuals composed of external consultants and the organisation's staff involved in the re-engineering attempt. The first author of this paper was involved in the re-engineering attempt as a senior consultant for about one year. The whole project lasted approximately four years. Interviews with the organisation's staff enabled the researcher to keep track of the development of the re-engineering attempt, from the time he left until its formal end. The case is presented in a summarised narrative form. This narrative is followed by a discussion of whether the re-engineering attempt was successful. The discussion concludes that the attempt failed. Three reasons for the failure are identified and discussed. Finally, the issue of whether re-engineering is an appropriate approach for the public sector is discussed. Some alternatives to re-engineering are presented. THE BRAZILIAN PUBLIC SECTOR Brazil has one of the largest public sectors in the world. A glimpse of how large this public sector is can be obtained from the analysis of some statistics published in 1994 by Exame (1994, pp. 44-45) comparing the 50 largest public organisations in Brazil - all stated owned enterprises - with the 500 largest private organisations in the country. These statistics reveal that the total revenues of the 50 largest public organisations in Brazil (US$ 54 billion) amount to approximately 33% of the revenues of the 500 largest private organisations in the country (US$ 163 billion). Moreover, the total value of the assets of the 500 largest private organisations in Brazil (US$ 153 billion) amounts to less than 77%
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of the value of the assets of the 50 largest public organisations in the country (US$ 201 billion).
In spite of the gigantic proportions of the public sector in Brazil indicated by the figures above, the same statistics published by Exame show that the total profit of the 50 largest public organisations in Brazil was negative (-US$ 2.7 billion), while the profit of the 500 largest private organisations was positive (US$ 2.8 billion), in an almost one-to-one proportion. One of the explanations for the generalised lack of profitability in the Brazilian public sector that these figures represent, are the numerous privileges that public employees enjoy in Brazil. These privileges include security against dismissals and wage reduction, even in unprofitable areas, and the guarantee that employees will continue receiving their full salaries after retirement. None of these privileges is enjoyed by employees of private organisations in Brazil. These privileges and the size of the public sector in Brazil turn public organisations into precious political assets that can be used in political negotiations between the government, supporting parties and opposition parties. RE-ENGINEERING A PUBLIC SECTOR ORGANISATION
This study took place in a large civil engineering organisation, PROJ (a pseudonym), owned by a local government in Brazil. The main business processes at PROJ were related to the planning and co-ordination of construction projects, whose main customers were the federal government and branches of the local government. By the time the reengineering project was started, PROJ was co-ordinating a major government construction project of high national political relevance. That project had been allocated 1 an approximate budget of one billion US dollars by the government.
1
The term billion refers in this paper to 1,000 million. 5
Organisational context PROJ's organisational structure was a multi-layered hierarchy of areas, divisions, departments, sub-departments, sections and sub-sections. These layers were headed by managers with different types of backgrounds, mostly civil engineers, building legislation experts, and human resource management professionals. Some 10 to 20 per cent of these management positions were assigned to individuals whose political orientation was aligned with that of the local ruling party, through which the head of the local government and most of his cabinet had been elected. This management background distribution mirrored that of the board of directors. PROJ's CEO reported directly to the head of the 2 local government, and was a member of the local ruling party .
PROJ's non-management staff comprised technical, clerical and support staff. Most of the technical staff were land and building surveyors, project controllers, and engineering and law consultants specialised in the construction industry. Secretaries accounted for most of the clerical staff. Support staff worked in vertically integrated departments such as IS, finance, and personnel. Clerical and support staff together accounted for approximately half of PROJ's total permanent staff. The labourers in the construction projects coordinated by PROJ were employed by building contractors, and had very little contact with PROJ's permanent staff.
The board of directors at PROJ was well aware of several problems facing the organisation. In their view, these problems were related to the organisation's structure.
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Political alignment with, and membership of, the government party is commonly found in
the top management staff of public organisations in Brazil. The same goes for several other countries, including US, New Zealand, England and Australia. 6
Unlike many private companies in the construction industry PROJ was very large, highly hierarchical, and vertically integrated. The negative effects of such characteristics, such as slow response to customer requests and lack of efficiency, were felt everywhere in the organisation, which led to low internal morale. This also led to a permanent conflict between the union and management, who often blamed each other for the problems the organisation was facing.
The organisation was initially established to act as an inspection body, and later to supply the government with extensive construction services. It had not, though, been able to keep up with an increasingly competitive construction industry, and, in particular, was lagging behind in the use of new technologies. The main causes for this were lack of flexibility and, mostly, a complete lack of competition. As occurs in several highly regulated internal markets all over the world, regulatory and related enforcement services become a monopoly of government organisations. This was the case with PROJ, whose several land and building inspection services were compulsory and closed to competition. This body of services expanded over time, to comprise all construction services contracted by the local government.
Why re-engineer? PROJ was facing intense attack from some political parties and other private competing companies, who questioned its competence to play the critical roles it had been assigned by the government. That attack was intensified after it was decided that PROJ would coordinate the important government construction project mentioned before. This project was expected not only to turn over one billion US dollars during three to four years but also directly affect 500,000 families.
Besides the attacks from the competition, PROJ was also threatened by the prospect of deregulation in the construction industry. There had been recently an increasing number of 7
successful examples of adoption of non-compulsory quality standards in the industry. Several of these standards had been derived from international standards such as ISO 9000. The prospect of deregulation called for a radical re-thinking of PROJ's structure and processes. In particular, several of PROJ's processes were likely to become obsolete with the deregulation.
Also, PROJ's CEO had recently attended a series of courses and workshops on new technological developments in the construction industry. He returned with new ideas on how the redesign of core processes could radically improve PROJ. He had also been evaluating new project management software packages that could be used to help PROJ to move away from its focus on the inspection and co-ordination of construction projects, towards a more pro-active planning-oriented approach. These ideas found enthusiastic support from some members of the board of directors. This led to the decision to refine and implement those ideas as part of a re-engineering attempt.
In a bid to provide PROJ with consulting services, two large consulting companies were hired to provide technical and methodological support to the re-engineering attempt. One was a national IT consulting company with extensive experience in the construction industry. The other was a multinational management consulting company. An initial assessment of the organisation, by a group with members from both consulting companies and the board of directors, identified two main problems to be tackled in the reengineering attempt.
The centralisation of IT services in a central data processing department (CPD) was one of the problems identified. The CPD was responsible for running applications on a central mainframe and fulfilling the requests from other departments. As several of PROJ's core activities were highly information intensive (e.g. setting up public bids and co-ordinating construction projects) this centralisation turned the CPD into a bottleneck. Urgent requests were often held up for several days, which generated dissatisfaction from the 8
primary users of the information, and a decrease in the overall quality and efficiency of PROJ's processes.
The second problem initially identified to be tackled in the re-engineering attempt was the high number of internal points of contact in core processes, which was seen as negatively affecting both the efficiency and quality of the services provided by PROJ. At the source of this problem was the hierarchical structure of the organisation, with a large number of areas, divisions, departments and sections. It was estimated that at least 30 per cent of this structure could be eliminated. This would call for a drastic reduction in the number of intermediate managers; particularly those whose main function was to mediate the flow of information between the top and the bottom of the organisation. New information channels would have to be created between management and line staff enabled by IT. In the new organisational structure, managers would have to adopt a more empowering style of management. They would have to manage more people, with less supporting staff such as secretaries and aides, and with the use of decentralised IT applications running on a local area network.
Planning ahead Two business process re-engineering groups were formed. The first group, the IT group, was initially responsible for setting up a local area network with PCs and downsizing the mainframe applications onto it. The second group, the organisational re-engineering (ORE) group, was responsible for the analysis of the organisation's core business processes, and their radical redesign and implementation.
The ORE group was expected to be a client of the IT group, which was expected to provide enabling IT technologies to support the implementation of the business process redesign proposals. Both groups had representatives from both consulting companies, the board of directors, and senior management staff. The two groups were expected to work 9
in close collaboration. The IT consulting company had a strong influence over the IT group, whereas the ORE group was heavily influenced by the management consulting company. Both groups were aware that, especially in the service industry, the use of IT to automate existing business processes had often fallen short of the expected results (Hackett, 1990; Hammer, 1990).
Implementing the plan The IT group started by setting up the infrastructure of the local area network (LAN), which was ready to be used about eight months after the start of the re-engineering attempt. As a result of this new infrastructure, computers connected to the LAN were accessible to most ofPROJ's staff.
During the setting up of the LAN the IT group faced strong opposition from CPD's staff. One senior member of staff at that department was dismissed partly because of this opposition. Almost all of the remaining staff of the CPD then joined PROJ's union, which was critical of both the re-engineering attempt and the use of consulting companies. The union's main criticism of the use of consulting companies was that while employee salaries had not been increased for years PROJ was paying a considerable amount to the consulting companies. The total expenditure with the two consulting companies alone was of approximately US$ 800,000 a year. The union's opinion was not shared by the majority of the board of directors, who believed that no radical changes would be achieved without the technical and methodological support provided by the consulting companies.
Once the LAN structure was established, the IT team set out to downsize the applications from the mainframe on to the LAN server. Most of the applications had been written in a specific computer language (a dialect of the BASIC language) by members of the CPD staff. The IT group was assured by a highly respectable software vendor that there was a commercial software product (a compiler) that could be used to convert all applications 10
on the mainframe to LAN use with minimal human intervention. That product was purchased by PROJ. Even though that product worked for some simple applications, it proved to be a failure for most of them. This called for the adoption of externally developed applications. The IT consulting company was the market leader in the development of software applications for the construction industry, and recommended its own products to fill this need. This, in turn, caused more opposition from PROJ's staff, the union, and even from the management consulting company. The union alleged that the IT consulting company was trying to become a privileged IT supplier by the backdoor, which was against the public sector purchasing law in Brazil.
The transition from mainframe applications to LAN based applications took about six months to be completed, and intensive staff support and training were required. In the beginning, that transition seemed almost impossible, as PROJ's staff had been encouraged by CPD and union members to boycott the new applications. In spite of the CEO's support for the re-engineering attempt internal opposition was sharpened by sheer lack of interest on the part of many users. This occurred particularly because the costs of adoption of the downsized applications were initially much higher, for the users, than the perceived benefits. Users had not only to adapt to the new software interfaces, but also to other changes in established standards, such as a new coding system for construction supplies.
After a few months, though, it seemed that the individual costs of using the new applications had been offset by the perceived advantages brought about by the new general-use software applications available in the network. Of particular relevance in this respect were groupware applications with features such as e-mail and computer conferencing, and a new LAN-based project scheduler, with group support features that allowed for unprecedented large-scale co-ordination of construction projects. In addition to these benefits users were provided with fast and decentralised information management. This happened as the users were granted access to specific applications, 11
previously available only through the CPD, such as those which allowed for access to data about contractors and respective services. Staff were also given real-time access to information that were considered classified before such as information about the development of public bids for large construction projects.
Among the groupware applications adopted the most successful was electronic-mail. This application was instrumental in gaining the confidence of PROJ's staff. Electronic-mail became a new communication channel between the IT and ORE groups and staff, who were thereby freed from the peer surveillance that often occurs in verbal interaction. Staff could interact with those groups without fear of being seen as "co-operating with the enemy". From the perspective of the IT and ORE groups this interaction was an important means of obtaining relevant information about PROJ's processes. However, the new communication medium had also its drawbacks, such as higher ambiguity and likelihood of negative personal repercussions (e.g. messages could be printed out and used as evidence that some staff members were collaborating with the IT and ORE groups).
In spite of the improved communication between PROJ staff and the ORE group, the ORE group seemed unable to gather all the process information necessary to effectively redesign PROJ's core processes. As a result of this the ORE group analysed and modelled several processes with difficulty, which added a certain amount of uncertainty to the subsequent redesign proposals, and related structural changes. This lack of uncertainty was perhaps one of the underlying reasons for the subsequent failure of two pilot process redesign attempts involving two distinct departments, in which some key staff members pointed out that the process changes were ineffective towards the main problems being faced by their departments at that stage.
Another problem faced by the ORE group was that some redesign proposals foundered on regulations established by law. The process of setting up public bids, for example, was identified as extremely complex and cluttered with several unnecessary activities. 12
Moreover, this was one of the most frequently executed processes at PROJ. This process was analysed and subsequently redesigned by the ORE group several times. All redesign proposals were discussed with lawyers, regarding their legal validity. These discussions, though, found that most of the changes proposed might invalidate the result of future bids. Only slight changes in the process could really be implemented, without making the process prone to be contested by lawyers representing companies that had lost bids to others.
This situation led the ORE group to gradually shift its efforts to other types of activities, such as helping understaffed departments with some critical activities, like setting up bids and contracts, and developing software applications to automate existing processes. This had been done at the management consulting company's discretion, and produced opposition from some members of the board of directors and the IT group. Some of the members of the board of directors aired their discontent with the fact that the ORE group was not doing what it was expected to do. That is, the ORE group had been established to analyse PROJ's processes and radically redesign them, not to use expensive consultants to perform existing processes in understaffed departments. This situation deteriorated to a conflict, where the management consulting company targeted one of the members of the board of directors. This director was eventually dismissed by PROJ's CEO.
The problems faced by the ORE group to carry out their share of the re-engineering attempt led to conflict with the IT group. This was caused mainly by the decision of the ORE group to develop software applications to improve the efficiency of certain processes at PROJ. This was seen by the IT group as an "invasion of its territory" that was done without any previous consultation. However, in some meetings were these initiatives were discussed in the presence of the board of directors, the ORE group presented them as necessary and likely to improve service quality and productivity. That argument was difficult to counter since no bottom-line quantitative assessments of improvement had been carried out. 13
In spite of the lack of dramatic bottom-line results, the situation described above persisted during the remainder of the re-engineering attempt, as indicated in the re-engineering attempt summary in Figure 1.
Stage
Duration
Description
Problem definition
6 months
-Two main problems were identified: (1) Information processing centralisation in the CPD (2) High number of contact points in core processes
Planning the re-engineering attempt
6 months
-IT and ORE groups were set up -The responsibilities of the two groups were negotiated -The re-engineering attempt was planned in detail
IT insfrastruture implementation
8 months
-The LAN infrastructure was implemented
IT downsizing
1 year
-Mainframe applications were downsized to the LAN -New applications were introduced
Core process re-engineering attempts
1 year
-The ORE group unsuccessfuly tried to re-engineer some of PROJ's core processes
Process automation
10 months
-The ORE group moved away from re-engineering core processes towards automating existing processes -The IT group moved into IT infrastrutured maintenance and provision of technical support for the ORE group
Figure 1: Stages of the re-engineering attempt
The IT infrastructure at PROJ was considerably improved. The IT group gradually moved towards the role of supplier of IT infrastructure support, whereas the ORE group assumed the role of systems analyst and developer of specific applications to automate existing processes. The IT group had to put up with this situation in order to avoid further conflict with the management consulting company, which had already proved to have enough support from PROJ's CEO to adopt any necessary measures, such as having its IT consulting partner removed from the re-engineering attempt. This situation was supported by PROJ's CEO, whose view was that PROJ had been significantly modernised by the reengineering attempt. This seemed to be true, from an IT point of view. Moreover, the re-
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engineering attempt had been getting some positive external recognition. For example, an article praising the attempt as an "innovative and daring" project of modernisation of the public sector had recently appeared on a local independent newspaper.
WAS THE ATTEMPT SUCCESSFUL?
Successful re-engineering projects are considered to be those whose target core business processes have undergone radical change, and whose implementation efforts have led to radical organisation-wide improvements in quality and productivity. There are several representative examples in the literature, which display these characteristics (Bell, 1994; Caron et al., 1994). This situation is far removed from localised process improvement, such as the highly desirable results obtained through quality management approaches (Deming, 1986;Juran, 1989; Ishikawa, 1986).
Four years after it was started, the re-engineering attempt at PROJ was hailed as a "successful re-engineering project" by some. Among these were PROJ's CEO, who believed he had taken over an old-fashioned organisation and turned it into a modern one, with the use of "state-of-art IT". Several local processes had been automated and the access to IT had been decentralised. IT users had been given direct access to information relevant to their work by the downsizing of the applications from the mainframe to the local area network. The US$ 1 billion construction project, for which PROJ had been hired by the government, had been completed.
From a re-engineering perspective, the attempt must be regarded as a failure. No radical changes in PROJ's business processes had been effected, yet the total investment in the reengineering attempt had been over US$ 8 million. Even though some processes had been automated, almost no productivity improvements had been achieved through staff reduction, due in major part to the constraints of Brazilian labour law. Moreover, the
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number of construction contracts granted by the government to PROJ had been reduced due to a reduction in the government construction budget, after the US$ 1 billion project was completed. This, combined with the lack of layoffs, meant that even the increase in efficiency achieved in some of PROJ's processes, which by no means was radical, would likely have no significant effect on overall costs.
It is clear that there were local business process improvements in the re-engineering attempt, due to the empowerment of IT users, the decentralisation of computer applications, and the availability of new project management tools. These improvements, though, lacked enough breadth and depth to generate bottom-line organisational results. Paradoxically as it may sound, the results of the re-engineering attempt have been overall negative. The improvements did not match the investment made; therefore the return on investment was negative. This type of paradoxical results is not so rare to occur. According to Hall et al. (1993, p. 119) "...paradoxical outcomes [similar to the ones narrated in this paper] have become almost commonplace".
REASONS FOR THE FAILURE OF RE-ENGINEERING AT PROJ
Why did the re-engineering attempt fail? A reflective analysis of the case suggests that there were four main reasons for it. The first reason was the effect of the political environment on PROJ's CEO in attaining objective goals. The second was the gradual shift of the focus of the ORE group from core business process redesign to problem solving and automation of existing processes. The third reason was the hiding of failure signs. This happened consciously at first, for self-preservation reasons, but later became unconscious and was reinforced by social-facilitation. The fourth reason was that radical changes in core processes in public sector organisations are often not feasible without either changes in law, or privatisation. These reasons are discussed separately next.
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The effect of the political environment One of the main problems every re-engineering group will face in a public sector organisation is the multitude of purposes that these organisations may have to serve. PROJ's CEO, supported by some of its top management, was initially looking for radical quality and productivity improvement. However, the progress in the re-engineering attempt clearly indicates that he was prepared to accept alternative results - provided that they were at least "apparently" positive while being politically acceptable.
The case suggests that political issues and visible outcomes may be considered of higher importance in public sector organisations than "mere" organisational results, depending on the political orientation of those involved. This is poorly aligned with the underlying down-to-earth philosophy of re-engineering. Re-engineering typically increases organisational productivity. It enables organisations to produce more, with lower costs. In service organisations, such as PROJ and most organisations in the public sector, most of the costs are labour costs. Therefore, a typical re-engineering project in the public sector will lead to massive layoffs. These, though, normally go against promises made to the electorate during the political campaign. Even if this is not the case, massive layoffs are likely to strengthen the argument of the opposition parties, unless they are accompanied by real benefits to a larger population. Even though, there must a well-orchestrated structure to advertise those benefits. There will always be the temptation to take the shortcut, as PROJ's CEO did, of "keeping up appearances" while avoiding political damage.
The ORE group gradually shifted its focus The shift in the focus of the ORE group, from re-engineering to process automation is clear from the narrative. However, during the re-engineering attempt that shift was not easy to perceive and therefore to counter. This is particularly valid in cases where the
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radical process-focused characteristic of re-engineering is not well understood, or tends to be avoided due to barriers that may show up on the way. Two significant barriers to the ORE group work at PROJ were the general opposition faced from PROJ's staff, and the limitations on employment change imposed by law.
The avoidance of a radical change approach, which seems to be the case at PROJ, may lead to an attitude where the underlying structure of processes is not the focus of improvement. This focus moves to the improvement in the efficiency of those processes and the solution of superficial problems, which can still be defended as a process-focused approach to improvement. This attitude seems to be in tune with much of the practice incorrectly referred to as re-engineering today. This practice, well aligned with Davidson's (1993) first phase in business transformation, places emphasis on the automation of existing business processes to improve their efficiency. This is far removed from what Hammer andChampy (1993) and Davenport (1993) call re-engineering.
A double bind prevented recovery In the case, the lack of understanding of the true nature of re-engineering did not seem to be the main reason why the focus of the re-engineering attempt moved from radical to incremental improvement. Even if some misunderstandings did exist, they seemed to have been combined with another type of behaviour, commonly observed in stressful business situations. This behaviour is presented by managers and decision makers faced with what is described by Argyris (1977) as a "double bind". The double bind comprises two norms, one that says "hide errors" and its opposite that says "reveal errors". If managers choose the first norm they know that what they do is necessary yet counterproductive to the organisation. If they choose the second norm, though, they risk exposing a whole network of camouflage and deception. The choice often lies on the less risky norm that says "hide errors".
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In double bind situations, managers at first refuse to admit that there are problems. This approach is taken to avoid the consequences of having to deal with those problems. Then, influenced by social facilitation factors (e.g. this behaviour is reinforced by peer support), they gradually start to lose sight of those problems, as if they did not actually exist3. In the re-engineering attempt at PROJ, the ORE group, when faced with the prospect of failure in radical process redesign, shifted its focus to less problematic intermediate automation goals. This was done for self-preservation. Intermediate goals were initially used as an excuse, but soon they began to be seen as the "real goals" of the re-engineering attempt. This found support from some management staff, which reinforced the belief that those were the goals to go for. In PROJ's case this situation was compounded by the fact that this support came also from the CEO.
Radical change in the public sector requires law changes or privatisation Radical process-focused change in a public sector organisation like PROJ can only be achieved with deep changes in their bureaucratic practices. This, in turn, normally cannot be achieved without either changes in the law, or privatisation. This is exemplified in the narrative by the attempt to redesign the process related to the setting up of public bids. As changes in the law typically involve long political negotiations, democratic countries seem to be left with only one effective alternative for radical change in public sector organisations - to sell them off and let the new private owners do it (Jensen, 1991). Even deregulation and breakdown of government monopolies, can be seen only as initial measures that will lead to further privatisation or simple elimination of unnecessary government departments. This suggests that re-engineering in the public sector, as several public sector leaders have come already to believe, may not be possible (Mechling, 1994).
3
One instance of this phenomenon is known as groupthink. See (Janis, 1972) for a detailed
study of groupthink and its negative impact on decision making in the public sector. 19
It will occur only when those organisations become private, but then they will no longer be in the public sector.
CONCLUSION
This paper describes a failed re-engineering attempt in a large public sector organisation in Brazil. The organisation, a civil engineering company, had objective and subjective reasons to undergo a re-engineering attempt. Among the objective reasons were the fact that the organisation needed to show improvements in its competitiveness to secure a large government contract, and the threat of deregulation of the construction industry. Among the subjective reasons was the increase in political prestige associated to the modernisation of the organisation through IT, and the decentralisation of information access and use of software applications. When the attempt to re-engineer the organisation was begun, though, some unforeseen barriers arose. The most difficult to overcome was the barrier associated to the rigidity imposed by law on the organisation's business processes. To this barrier were added the lack of support from staff, and the disposition from the CEO to accept local process improvement and automation in the place of real reengineering, provided that the appearances had a positive impact on his political image.
An analysis of the attempt at PROJ suggests that there were four main reasons for the failure. The first was the effect of the political environment on the CEO. The second was the gradual shift in the focus of the re-engineering attempt, from radical core process redesign to local improvement and automation. The third, was the "double bind" situation that at first led the ORE group to consciously hide problems. This attitude was then reinforced by the support from management staff, leading to a complete lack of awareness of the problems and a belief that the re-engineering attempt was achieving its goals. The fourth was the need to have either law changes or privatisation to allow re-engineering efforts to be successful.
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Do these findings have some meaning for all areas of public sector organisations? What about areas of the public sector that cannot be privatised, such as the police and armed forces, and certain administrative services? There have been success cases in these areas that really resemble re-engineering (Mukherjee and Braganza, 1994), but most of them relied on outsourcing services or parts of them. In these cases, parts of the processes were farmed out to private companies (Williams, 1994; Coppell, 1994) or even the community itself through empowerment of voluntary associations (Osborne and Gaebler, 1992, Chapter 2). While these cases can be seen as re-engineering by some, because they might result in radical changes in the processes, they always rely on some sort of initial association with the private sector or the community to occur. This initial association, though, hardly involves business process analysis and redesign.
We conclude this article by suggesting that successful re-engineering may not be possible in the public sector. Alternative ways to radical change in the public sector, as other studies indicate, are privatisation, partnerships with the private sector, and community empowerment. In any of these situations, however, all or part of the processes may first have to go into private hands or the community in order to set the stage for radical change in the way that characterises re-engineering.
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